Why Size Really Is Everything
The importance of marketing budgets explained by a marketing company? Sounds legit…
Seriously though, as marketers, we know how important the size of your marketing budget is. Not for us, but for you. It’s how you get your work out there for the world to see. It’s how you get people on board. It’s how you make money.
So not to brag or anything, but your marketing budget is a big deal.
However, we know that hearing that from us just sounds like we’re marketing again. So, without further ado…
*Introduces Maths to centre stage*
We’ve all been there. You’ve got a marketing budget, or at least a loose idea of what you want to spend, so you spend it but don’t really track the results. You’re not really testing what’s working so you might as well be chucking money at the wall. So why not use some maths? Why not actually calculate what works?
Not only will this give you a good benchmark for where you’re going with your business, it will help you know exactly what your budget is.
Something that we encourage all of our clients to do is figure out the lifetime value of a client.
How much do they spend in a year? How many years do they stay with you?
The answer to these two questions will give you a feel for what you need to be willing to spend to acquire that average client.
A, B, C easy as 1, 2, 3
Let’s have a think about it then. Say a client spends £100 per transaction, they do ten transactions in a year and they probably stay with your business for ten years.
That’s 10 transactions X £100 = £1000
£1000 X 10 years = £10’000
So that’s a client, that in their lifetime, is worth ten grand to your business.
How much would you be willing to spend to acquire a client like that? Once you know that figure, whether it be £500, £1000, £1500, you can start to set some marketing goals around that.
How are you going to put yourself in front of that type of person? How are you going to attract
that type of person to interact with your business? How are you going to sell to that person, once they trust you and know who you are as a business?
You see? A quick bit of maths and you’ve got lifetime value of a client, with an ideal acquisition cost for that client. And when you know that, you can go a long way with your marketing plan.
We’d love to chat to you about this more, so why don’t you get on Discovery Call with us?
February is pretty booked up but we think we could squeeze a few more in…
Apply for Discovery Call here and shock people with the size of your budget…
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